As America closes out 2009 with roughly 1.4 million bankruptcy filings, a new survey reveals the possible economic factors behind the surge.
Respondents were asked to select which economic factor forced them to consider bankruptcy, and how many people they know who had also considered bankruptcy in the past year.
Most community property states are in the South and West. That’s because the idea of community property came from Civil Law in continental Europe rather than from Common Law in England. Some of the Southern and Western states originally were Spanish or French territory. So these states have some legal heritage from those countries, including the idea of community property.
Wisconsin adopted the idea of community property recently. So it comes as a surprise to many Midwesterners who move to Wisconsin from neighboring states like Michigan, Minnesota or Illinois to find out that their marriage has different economic consequences in Wisconsin.
This can be important in bankruptcy cases. That’s because bankruptcy allows a debtor to get rid of debt. And strictly speaking, debt means claims held against a debtor by a creditor.
Who is a “creditor” in bankruptcy? A creditor is someone who holds a claim. Claim includes a community claim.
So if you are married in a community property state, you are just as liable for your spouse’s debt, incurred during marriage, as your spouse is. That comes as a surprise to many people. The good news is that in bankruptcy, community claims are claims against your bankruptcy estate, even if you are the only debtor who files a bankruptcy case. You’ll eliminate claims against you by reason of your marriage to your spouse in a bankruptcy case because claims include community claims.
For more information about community claims click here.
Lakelaw represents people in bankruptcy cases from Chicago to Milwaukee in Wisconsin and Illinois.
You may recall the “Soup Nazi” episode from the hit television series Seinfeld. In the video, the Soup Nazi can be seen taking away soup from George because George cannot seem to follow the proper protocol. I like to compare the soup nazi to the mortgage companies who are supposed to be helping homeowners modify their mortgages under the HAMP ( Home Affordable Modification Program). The two scenarios are remarkably similar. The video goes something like this. George and Jerry get in line for soup, and they get their money ready. They move cautiously through the line and then when George asks for bread, the soup is taken away. ”No Soup
A recent ruling by an Idaho bankruptcy judge, reported by the Des Moines Register, could mean bad news for parents with 529 tax-advantaged college savings plans for their children who file for bankruptcy.
The case in question apparently involved a couple who had put $14,500 into a 529 college savings account for their daughter. The girl’s grandmother reportedly contributed an additional $40,000. Ideally, the funds would have been used for the daughter’s education expenses (including textbooks, tuition, room, board and fees).
But, in this case, the girl’s parents filed for bankruptcy shortly after putting the money into the 529 account. And t